Offshore Wind Worldwide 2022 edition - Flipbook - Page 165
Offshore Wind Worldwide 2022
An IPP will typically negotiate a long-term
fixed-price contract with an RPS Participant
in advance of COD, and the consequences of
a project delay under this agreement is a
matter for bilateral negotiation. Delays will
necessarily subject the developer to the risk
that the REC multiplier applicable to the
project may be revised down, since the REC
multiplier is not fixed until the KNREC
inspects the project facilities following
construction.
The MOTIE reviews and recalibrates REC
multipliers every three years to optimize the
supply and demand of different types of
renewable energy, and it stands to reason
that, with time, REC multipliers for OWFs
will gradually decline as construction costs
fall. The next recalibration is scheduled in
the course of 2021, and it is expected that the
multipliers for OWF will change to take into
account water depth, as well as distance from
shoreline.
C. Examples of actual and future tariffs
Feed in tariffs are not applicable to new
projects in Korea’s renewable energy market
since the advent of the RPS scheme in 2012.
Market pricing for both SMP and RECs is in
constant flux, which is why utility-scale
offshore wind IPPs negotiate long-term
fixed-price contracts with RPS Participants
to ensure long-term predictable cash flows.
Combined SMP plus REC prices reflected in
long-term fixed-price contracts are
negotiated on a case-by-case basis and are
not publicly available.
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V. Grid and grid connection
A.Planning and construction of the
grid connection system
The project developer is responsible for
preparing a viable plan for connecting the
OWF to the applicable onshore KEPCO
substation and obtaining rights to use the
lands on which transmission lines will be
installed. The transmission lines between the
OWF and the grid connection point will be
constructed by KEPCO on behalf of the
developer or by the developer pursuant to
KEPCO’s engineering standards.
B.Responsibility for the cost of the
grid connection system
The costs associated with connecting to the
transmission grid are borne by the
developer.
C.Consequences of delays and
disruptions of the grid connection
system
Risk allocation for delays and disruptions of
the onshore grid is technically a matter for
contractual negotiation in the KEPCO grid
connection agreement, but, in practice, IPPs
typically have no choice but to accept
KEPCO’s general terms and conditions,
which do not provide compensation for
delays or disruptions of the onshore grid
connection absent fault of KEPCO.